Under the rational expectations hypothesis, if wages adjust rapidly to new information about intended policy actions, monetary policy can have an effect
A) in the long run, but not the short run.
B) only in the short run and only if the policy is unanticipated.
C) in both the short and the long run.
D) only in the long run and only if the policy is fully anticipated.
B
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The country of Southland produced $2,000 billion of output in one year. The population of Southland was 100 million, of whom 60 million were employed. What was average labor productivity in Southland?
A. $20 B. $33 C. $33,333 D. $20,000
Taxes, savings, and imports tend to magnify the effect of any spending change in the economy; that is, if investment spending initially increases, then spending will grow even more as taxes, savings, and imports increase, so the economic growth will
accelerate. Indicate whether the statement is true or false
Jim, a U.S. citizen, works only in Croatia. The value added to production from his employment is:
A) included in only Croatian GNP. B) included only in U.S. GDP. C) included only in U.S. GNP. D) not included in either U.S. GDP or U.S. GNP.
Whether or not a reduction in the budget deficit is a pro-growth measure depends on how the budget deficit shrinks
a. True b. False